Prolaris growth prospects
In the first quarter of 2018, Myriad Genetics’ (MYGN) Prolaris reported revenues close to $2.9 million, which is flat growth on a year-over-year (or YoY) basis. On May 25, 2017, the company announced that a Medicare Administrative Contractor (or MAC), Palmetto GBA, issued positive LCD (local coverage determination) and expanded coverage for the Prolaris test for Medicare beneficiaries with favorable intermediate-risk prostate cancer. This is in addition to the LCD secured by the Prolaris test for low-risk prostate cancer patients. While no material revenue impact was witnessed due to the expanded Medicare coverage, Myriad genetics reported double-digit YoY growth in Prolaris volumes with an increasing number of intermediate prostate cancer risk patients opting for the test. The company anticipates reimbursement for tested patients in the second quarter of fiscal 2018.
Notably, Myriad Genetics accounts for 1.2% of the SPDR S&P Biotech ETF’s (XBI) total portfolio holdings.
Prolaris market opportunity
The above diagram shows that the majority of low-risk prostate cancer patients are overtreated. While the American Urological Association (or AUA) projects that half of the prostate cancer patients have very low risk based on pathological and clinical factors, almost 60% of these patients are aggressively treated. These therapies, while not required, also negatively affected the patients’ quality of life due to unfavorable side effects.
On the other hand, there have been certain high-risk patients who fail to receive multi-modality treatment due to inappropriate assessment of the patient’s cancer risk profile.
Prolaris helps to correctly estimate the aggressiveness of prostate cancer, enabling the physician to assess the disease outcomes and thus determine optimal patient therapy. The test aims to target market opportunity worth $1.5 billion by 2020. Myriad Genetics aims to achieve 13% penetration for Prolaris in this market segment by 2020.
Expanded Medicare LCD coverage has extended Prolaris reimbursement to 50% of the addressable market in the US at the end of fiscal 2017. This coupled with the rapid advancement of Prolaris-kit-based initiatives is expected to enable Myriad Genetics to compete effectively with other molecular diagnostic tests from peers such as Novartis (NVS), Roche Holdings (RHHBY), and Becton Dickinson (BDX).